Olive Council Advisers Meet in Istanbul as Imports Climb

Imports of olive oil rose about 20 percent in the six markets the International Olive Council tracks closely, while consumption in Greece, the country that drinks more of it per head than anyone, went the other way. Those were the headline numbers from the 37th meeting of the council’s advisory committee on olive oil and table olives, held in Istanbul and written up this week. Here is what the committee heard and why the Greek line is the one to watch.

What the committee was told

Representatives from ten countries went through import data for their own markets. In the first seven months of the 2010/11 season, imports across the six analyzed countries were up around 20 percent on a year earlier, with Brazil leading at about 21 percent and Japan the exception, down around 10 percent.

The council’s executive director, Jean-Louis Barjol, used fresh figures to make a promotional argument: in the markets where the council runs campaigns or intends to, a list that includes Australia, Brazil, Canada, China, India, Japan, Russia, South Korea, the United States and the European Union, consumption of the virgin grade has risen 35 percent over eight years. He also presented the agency that won the open tender for the North American campaign, the Minneapolis firm Exponent PR, picked from three finalists out of six bidders.

On prices, the meeting heard what producers already knew from their own invoices. Italian prices had dipped after touching their highest level on record earlier in the season. Spanish prices were extending a slump that has now run for years.

The Greek number

Panayotis Karantonis, director of the Greek olive oil manufacturers’ association ESVITE, put Greek consumption at about 225,000 tons a year, roughly 20 kilos a head, the highest per capita figure in the world. He also said it has been falling, mainly because of the economic crisis.

The second half of his figure explains a lot about the Greek trade: about 45 percent of all the olive oil consumed in Greece is oil that growers keep for themselves or give to family. That oil never passes a till, never carries a label, and never shows up as a sale. A country whose own market is that informal has little cushion when household budgets tighten, and even less pricing power when it sells the rest in bulk.

Why it matters

The council’s strategy for years has been to grow consumption outside the Mediterranean while the producing countries drink less. The Istanbul numbers show both halves of that happening at once. New markets are buying more, and they are buying a lot of it as supermarket own-label, which is why rising imports have not lifted the price paid to growers in Spain or Greece.

• Import growth is real, but it is growth in cheap grades as much as in good oil.
• Promotion budgets follow consumption, not production. That is why the council is spending in North America.
• A falling home market in Greece pushes yet more Greek oil into the bulk trade, where Italy is the buyer.

The council has been running market campaigns in emerging markets for years, including its campaign in India. For the state of the Greek trade before the crisis, see Greece’s olive oil producers face a bitter harvest, and for how these numbers usually land, our reading of an earlier council market report.

Sources

• International Olive Council: Market Newsletter June 2011, published 11 July 2011 (archived copy)
• Olive Oil Times: Olive Council Advisory Committee Meets in Istanbul
• Olive Oil Times: Council Chooses Exponent PR to Promote Olive Oil in North America, 22 June 2011